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Bridging or home to home mortgages are the same things, just different terminology. These types of mortgages basically increase your current home loan to buy your new home. You may be able to borrow the fees too, like the transfer stamp duty on your new home. You may also have the option of borrowing some extra money to help with the repayments, during the 'bridging' finance period. Once your current home is sold, the funds from the sale will pay down your home loan, and you will end up with your new loan. The 'bridging' part of the home loan, is the period when you have a mortgage on both homes.
Most banks and lenders do offer bridging finance. It is important to note, that there are different rules with each bank or lender when it comes to bridging finance, so it is advisable to speak to your Mortgage Broker first, and learn all the options that apply to your situation. It too is advisable to consider having your 'bridging' finance pre approved, as this will give you some comfort as you begin to look for your new home.
Bridging finance is generally a little more expensive, as most banks or lenders won't discount your interest rate during the 'bridging' period of your home loan. The standard variable interest rate of a particular bank or lender, is generally the interest rate during the 'bridging' period of your home loan. Some banks and lenders too, may increase the interest rate after a certain period of time (eg. 3 months) during your 'bridging' finance period.
Once your 'old' home is sold, the funds from the sale will be used to pay down the 'bridging' home loan, thus ending the 'bridging' part of your home loan. At this stage, you will have your new home loan, and if applicable, a cheaper interest rate than 'bridging' finance offers.
If you would like some more information about bridging finance, contact Perth Mortgage Broker Group , or call Troy on 0411 229 602, 7 days a week.